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New Task for Ministry of Economy

The new proclamation by the government has tasked the ministry of economic affairs and finance with fully implementing the policies to get the country out of stagnation without increasing inflation, reported SENA.

Based on the decision, the ministry is responsible to formulate administrative strategies aimed at settling government debts, as well as improve business environments and finance projects through capital market.

The proclamation which was issued by Es’haq Jahangiri, the first vice president, certifies that banks and financial institutes can use bonds backed by mortgage and non-mortgage loans. It also boosts the bonds secondary market through option contracts.

If implemented, the new plan would help the government bonds use inflation-protected floating interest rates. It also makes the banks sell their properties at mercantile exchange markets.

The parliament earlier approved a one-starred bill on eliminating the barriers to competitive production and enhancing the country’s financial system, known as the bill on countering inflationary stagnation.

In August, Ali Tayyeb Nia, the minister of economic affairs and finance, went to parliament to put the bill before the House.

Iran has experienced high inflation in recent years, owing both to the government’s economic policy – including the execution of the second phase of the subsidy reform plan, cash handouts and expansionary funding of housing projects – and the impact of western sanctions, which intensified in 2010 following a dispute over Tehran’s nuclear energy program.

Prices skyrocketed in 2013 as both the official and the unofficial foreign exchange rates weakened sharply and trade restrictions prompted shortages.